LME aluminium closed the week slightly lower on Friday night; SHFE continues strong on lower inventory

The US dollar was marginally lower on Friday against a basket of currencies, holding above a one-week low. Base metals ended mostly lower.  LME aluminium lost 0.5% and SHFE aluminium dropped 0.4%.

LME aluminium closed the week higher with the falling dollar. Three-month LME aluminium pulled back a bit after three consecutive trading days of increases, closing down 0.45% at US$1,783 per tonne overnight on Friday. With support from the 20-day moving average, it is likely to trade between US$1,770-1,800 per tonne today.

As on September 6, Friday, LME aluminium cash (bid) price stood at US$ 1761per tonne, LME official settlement price stands at US$ 1761.50 per tonne; 3-months bid price stands at US$ 1787 per tonne, 3-months offer price is US$ 1787.50 per tonne; Dec 20 bid price stands at US$ 1858 per tonne, and Dec 20 offer price stands at US$ 1863 per tonne.

The LME aluminium opening stock increased to 923225 tonnes. Live Warrants totalled at 707675 tonnes, and Cancelled Warrants were 215550 tonnes.

LME aluminium 3-months Asian Reference Price is hovering at US$ 1779 per tonne.

SME and SHFE Aluminium Price Trend

An over 4,000-lot buildup of long positions bolstered the most traded SHFE 1910 contract to a high of RMB 14,430 per tonne, refreshing the highest since August 20, when unexpected disruptions grew concerns about supply. The contract later erased some gains to end 0.31% higher at RMB 14,395 per tonne.  The October contract fell 0.42% to end at RMB 14,335 per tonne after departing longs dragged it steeply after it opened at RMB 14,410 per tonne overnight. The anticipated further decline in domestic primary aluminium inventories may keep prices between RMB 14,300-14,450 per tonne today. 

Falling inventories and limited supply pressure shored up aluminium prices, but upside from here was limited by the slow pace of demand recovery.